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The Supreme Court Decision No. 15 P / HUM / 2018 (“Decision”) granted a judicial review of Minister of Transportation Regulation (“Minister”) No. 108 of 2017 concerning the Implementation of Carriage of People using Public Automobiles (“Permenhub 108/2017”) and ruled that it was unlawful. In response, the government has issued Regulation No. 118 of 2018 concerning the Implementation of Special Rental Transportation (“Permenhub 118/2018”). The revoked provisions are mainly concerned with the implementation of special rental transportation better known as online transportation by the general public. This may also be seen as the role of the government in overseeing the implementation of special rental transportation in Permenhub 118/2018, which introduces a number of new provisions that specifically address special rental transportation.
SPECIAL RENTAL TRANSPORTATION COMPANIES
Special Rental Transportation Companies are defined as legal entities or micro-entrepreneurs or small-scale businesses that provide Special Rental Transportation1.Thus, in addition to legal entities, micro-entrepreneurs or small- scale businesses are also allowed to operate Special Rental Transportation as long as they possess their own permits as specified in Permenhub 118/2018. Special Rental Transportation Companies may run their own application or partner up with Application Companies2.
Permenhub 118/2018 defines special rental transportation as a door-to-door transportation service that utilizes an application that provides the rates (“Special Rental Transportation”)3. In order to regulate the implementation of Special Rental Transportation as well as improve the security and convenience of users, Permenhub 118/2018 specified a number of standards of services that must be fulfilled by the organizer, which consists of4:
1. The area of operation is limited to urban areas, getting around to and from airports or ports or from and to other transportation nodes;
2. Non-fixed schedule;
3. Door to door service;
4. The destination is determined by the user;
5. Required to list the rates on the
6. Required to meet minimum service
standards which are further divided into5: b. Safety;
e. Affordability; f. Equality; and g. Orderliness.
7. Orders are made through the relevant Application.
In addition to the standard of services, Permenhub 118/2018 also specifies the required specifications for vehicles that must be fulfilled to be allowed to be used as Special Rental Transportation, namely:
1. A sedan and/or non-sedan passenger car with a cylinder capacity of at least 1000 cc;
2. Have a black and white plate number:
3. Equipped with an application that shows the relevant rates as well as the driver’s
identity and the model of vehicles, etc.
Permenhub 118/2018 also sets out several rules on suspension that the Application Company must comply with. The Application Company must provide the applicable criteria in imposing suspension. Furthermore, drivers must have the opportunity to clarify against the reasons for suspensions and the right to object to the suspension. A re-registration option must also be made available for suspended drivers6.
Licenses wise, in order to carry out Application-Based Transportation, a Special Rental Transportation Company must obtain the following official permits (“Licenses”):
1. Decree on the permit to operate Special Rental Transportation. This decree contains certain information regarding the Company together with an attachment of the list of utilized vehicles. There is no expiration period for this decree. However, for licenses that have been issued before the enactment of Permenhub 118/2018, their validity will expire at the end of the validity of the relevant permit7; and
2. Standard Service Electronic Card (“E-Card”) that contains certain information regarding the Company and its operational area. Electronic cards are attached to each vehicle that is utilized as a special rental transportation and shall be renewed annually8. The Drivers whose vehicles already own E-Cards may receive access to the application provided by Special Rental Transportation Company or Application Company.
Requests for Permits will be processed through the Online Single Submission (“OSS”) system as stipulated in Ministerial Regulation No. PM 88 of 2018 concerning Norms, Standards, Procedures and Criteria for Integrated Electronic Business Licensing in the Land Transportation Sector9. Permits will be issued by the Minister if the operational area covers several provinces such as Jakarta, Bogor, Depok, Tangerang and Bekasi; or the Governor, if the operational area is limited to an area in a province.
In line with Permenhub 108/2017, application companies are prohibited from setting the rates, including offering promotions which cause the rates to fall below the determined lower limit rates. The Special Rental Transportation’s rate shall be determined by calculating both direct and indirect costs using formulas established by the Minister which will be evaluated every 6 (six) months. The Relevant Minister or Governor in the operational area will set the rates in the form of lowest rates limit and highest rates limit. Thus, the amount of the applicable rates shall subject to the limit, in the sense that the applicable rates may not be lower than the lowest rates limit and may not be higher than the highest rates limit.
Violations of the provisions in Permenhub 118/2018 are divided into minor violations, moderate violations to serious violations. Small acts of violations and/or violations will be dealt with by administrative sanctions in the form of warning letters. This may lead to freezing of licenses while serious violations may result in the revocation of licenses.
In comparison to the previous regulation, we note that Permenhub 118/2018 introduces several new provisions but also remove some obligations that were previously required. For example, Permenhub 118/2018 has dismissed the obligations for stickers; the obligations for Drivers to join a legal entity; KIR test; parking area facility and the requirements for a Special Rental Transportation Company to possess at least 5 vehicles.
Permenhub 118/2018 is still being socialized and is not in full effect. The government has provided 6 (six) months for all stakeholders in Application- Based Transportation, including Special Rental Transportation Companies and Application Companies to adjust their operations in accordance with Permenhub 118/2018, but no later than June 19, 2019.
<1> Pasal 1 (8) Permenhub 118/2018
<2> Pasal 26 Permenhub 118/2018
<3> Article 1 (7) Permenhub 118/2018
<4> Article 3 (1) Permenhub 118/2018
<5> Attachment I, Permenhub 118/2018
<6> Article 32 (3) and (4) Permenhub 118/2018
<7> Article 41, Permenhub 118/2018
<8> Article 15 (3) Permenhub 118/2018
<9> Article 14 Permenhub 118/2018